I got scammed last week. I bought a TV that never arrived. Who knew that www.cwyqr.com would not be a trustworthy site? To convince myself that there was an upside to this, I kept thinking “At lease it didn’t steal my identity. Just hundreds of dollars.” Luckily, once the irrational side of my brain finally admitted that the vendor wasn’t inexperienced and realized defeat, the rational side of the brain kicked in. I called my credit card company and got my money back. I filed reports with the Better Business Bureau and the Internet Crime Compliance Center. Then I bought a new TV from Amazon.com.
I could have switched the word ‘TV’ for a toaster, toner, or toddler (I like mine from Kids R Us; sure, it’s a large corporation, but the quality is so consistent). The storyline could still have played out the same way. But healthcare (especially health insurance) is one area where the template doesn’t fit because the market is not perfectly competitive. This is not to say that healthcare shouldn’t be competitive. Competition is good. But much in the way of rainbows, unicorns, and you, healthcare is special and thus needs special attention from the government.
One reason healthcare isn’t perfectly competitive is because of ‘information asymmetry’ between what consumers and sellers know. I know a lot less about what I’m buying and have less choice of what I can buy in healthcare than I do in a TV, toaster, or toddler. I can’t return a doctor’s visit. Most often, I can’t even tell if I have been scammed. Unlike Toshiba TVs, which all look and function the same way for easy comparison, I can’t easily compare my dermatologist visit to yours. What is Public Health to do in all this confusion?
|(Snap shot of the Massachusetts Connector, where you can easily choose and compare plans.)|
Public Health advocates and provides good information to fill in the gaps through research and legislation. That’s what the newfangled “health insurance exchanges” in the news are all about. As my friend (and exchange expert) Gennie put it, exchanges function like Kayak.com for health insurance, leading you to vetted vendors and setting up easy comparisons. I used it firsthand a few months ago, when my parents were looking for individual health insurance plans. They kept looking at me as if I’m supposed to know things about healthcare and insurance, but the idea of weeding through plans and fine prints to compare deductibles and networks all seemed very daunting. Yet thanks to The Connector, the Massachusetts exchange, there was no weeding. The process was as painless as shopping for insurance can be.
Policy Implication: Government regulations and research (like the Exchange) can help consumers overcome information gaps and connect them to vendors— thus restoring market competitiveness.